I started my banking career in the mid 90s working directly on the trading floor. It was noisy, exciting and full of testosterone. The nosiest and most boisterous on the floor were the voice trading money market dealers.
They loved shouting their orders and fills to some poor junior who helplessly tried to keep track of them on a whiteboard. Sometimes it was like being on the film set of Wall Street. One of the dealers seemed to think he was Gordon Gekko. He walked around the floor wearing blue pin striped trousers, holding his big red braces and passing his fingers through his gelled-back hair.
The nosiest day was when one of the dealers received a call from George Soros. He bellowed across the entire floor in an excited voice, “I got Soros on the line and he wants to buy 2 yards of cable. What’s our best price?” I had no idea what he was talking about, why would a Soros want to buy cable, and from a bank? I soon found out.
The derivative traders were the quietest and one of them, let’s call him Joe, was the smartest. Joe knew how to manage his clients, understood the maths in detail and wrote his own models and pricing software. The other derivative traders had quants and software developers to help them out, but Joe was a one-man band. He was regarded as a great trader not only by his colleagues, but by himself as well. And not without reason.
However, Joe’s reign came to an abrupt end one day and he was never seen again. I asked a colleague, “What happened to Joe?” She told me that Joe had been investigated and dismissed. “What for?”
It seemed the voice recordings revealed that Joe had given out a price that resulted in the response, “Joe, can you check your price?” Joe responded,” The price is good, are we done?” The other trader responded again, “Are you sure you want to trade at that price Joe?” Joe quickly responded, “The price is good.” “Done.”
It was all over, literally. Joe had failed to realise that the other trader was trying to help him. Joe’s calculation was off and had lost the bank a lot of money. Joe’s ego had got in his way.
What is ego? Ego is a perception of you, created in your mind to define who you are. It is build up from your experiences and what people have said to you. You will recognize it in statements you make about yourself e.g. "I am a great trader." Your ego will constantly look for evidence that it is right and ignore evidence to the contrary.
In Joe’s case, his ego was ignoring the evidence from the other trader that he was not as great as he thought he was and should check his price. He was probably thinking, “How can it be off, I have priced 100s of deals and they have always been right.” Joe’s example is extreme, but we have all experienced times when our ego has got in the way.
How can you avoid being destroyed by your ego? Listen out for the feedback you receive. I don't know what Joe does now, but it's a shame he didn't listen out for his.
Nick Foster has worked in the banking sector for over 20 years. He is a senior leader and part time executive and career coach in the city of London. He loves to help others learn from his experience by blogging each week at nicholas-foster.com.